What is Benchmarking?

Whether you're a beginner or an expert, you will find this Glossary useful.

Benchmarking is a type of measurement technique to evaluate the quality of organizations's policies, products and strategies using specific standards to make comparisons between different organizations or different segments of the organizations, with the goal of improving a product or service.

Benchmarking definition

Benchmarking is a type of measurement technique to evaluate the quality of organizations's policies, products and strategies using specific standards to make comparisons between different organizations or different segments of the organizations, with the goal of improving a product or service.

Types and objectives of benchmarking

Benchmarking can be:

- Internal: comparing performance between different groups or teams within an organization

- External: comparing performance with companies in a specific industry or across industries

These two main categories can be firther divided into three specific types of benchmarking:

1. Process benchmarking,

2. Performance benchmarking,

3. Strategic benchmarking.

Benchmarking has three main objectives:

1. To determine what kind of improvements should be made and where.

2. To analyze how other organizations achieve their high performance levels,

3. To use this information to improve performance.

How to measure benchmarking

Benchmarking typically measures quality (productivity per unit of measure), time (cycle time of x per unit of measure) and cost (cost per unit of measure) using a specific indicator resulting in a metric of performance that is then compared to others.